2018 (9) TMI 1018 - AT - Income Tax

Addition on account of undisclosed cash deposit in the assessee s bank account - explanation of the assessee regarding the source of ₹ 49.00 lacs was not accepted by the ld. CIT(A) on the ground that when the amount was withdrawn from the bank at the time of purchase of agricultural land in the financial year 2005-06 then the claim of keeping the said amount of ₹ 49.00 lacs for last 2-3 years in hand was not satisfactory when the assessee has not explained the utilization of the said amount in the mean time Held that - Assessee withdrawn ₹ 88,50,000/- for purchase of land, however, the assessee claimed that only ₹ 46.00 lacs was utilized for purchase of land during the financial year 2006-07 and the balance was with the assessee. This explanation of the assessee is otherwise not acceptable as the utilization of the amount for purchase of agricultural land has been explained by the assessee only to the extent which was shown in the titled document and not actual amount of purchase consideration. The preponderance of probability is against the assessee that the entire amount which was withdrawn at the time of purchase of agricultural land was utilized by the assessee for payment of purchase considerations of agricultural land when the assessee has failed to explain the time gap of two years for keeping such a huge amount of ₹ 49.00 lacs/42.50 lacs in hand. Accordingly, we do not find any substance or merits in the present appeal of the assessee and hence the same is hereby dismissed. - Decided against assessee

Summary

Issues:
Confirmation of addition of undisclosed cash deposit in bank account by ld. CIT(A), Alwar for A.Y. 2009-10.

Analysis:
The appeal was filed by the assessee against the order of ld. CIT(A), Alwar confirming the addition of ?46.00 lacs made by the ITO on account of undisclosed cash deposit in the bank account. The assessee explained that the cash deposit was from accumulated cash and sale proceeds of land. The Assessing Officer accepted part of the explanation but added ?46.00 lacs as unexplained cash deposit. The ld. CIT(A) upheld this addition. The assessee reiterated their contention, providing details of cash transactions and withdrawals. The ld. CIT(A) considered these submissions and decided that the explanation of the source of ?49.00 lacs was not satisfactory, as the utilization of the withdrawn amount for land purchase was not adequately explained. The ld. CIT(A) dismissed the appeal, stating that the preponderance of probability was against the assessee.

The Tribunal noted that the assessee did not appear for the hearing despite multiple adjournments. The Tribunal, considering the facts and circumstances, proceeded to hear and dispose of the appeal ex parte. The Tribunal reviewed the explanations provided by the assessee regarding the cash deposits and withdrawals. The Tribunal observed that while part of the cash deposits was explained, the remaining amount of ?46.00 lacs lacked credible evidence of its source. The Tribunal agreed with the ld. CIT(A)'s decision to treat this amount as unexplained under section 68 of the Act. The Tribunal upheld the dismissal of the appeal, emphasizing the need for reasonable and credible explanations for cash transactions.

In conclusion, the Tribunal affirmed the decision of the ld. CIT(A) to confirm the addition of ?46.00 lacs as unexplained cash deposit in the bank account. The Tribunal found the assessee's explanations regarding the source of the cash deposit unsatisfactory and lacking credibility. The Tribunal upheld the dismissal of the appeal, emphasizing the importance of providing reasonable and plausible explanations for financial transactions to avoid additions under the Income Tax Act.